Stan and Sylvia are each 22 years old, and not married. Sylvia is 8+ months pregnant with their unborn child, which is due in October of 2021. During 2021, Stan made $19,900 of wage income, and Sylvia made $49,000. Neither has given anything to charity, and Sylvia has all the medical costs covered by insurance. There are no other items to consider. They are contemplating two options: Option A: Sylvia has the baby, they do not get married, do not live together, and Sylvia lives with and takes full care of the baby. Option B: They get married, live together, and jointly take care of the baby. From a purely tax perspective, which option would you recommend for Sylvia and Stan? You must report empirical evidence from the facts here to support your conclusions. Please show formulas
Stan and Sylvia are each 22 years old, and not married. Sylvia is 8+ months pregnant with their unborn child, which is due in October of 2021. During 2021, Stan made $19,900 of wage income, and Sylvia made $49,000. Neither has given anything to charity, and Sylvia has all the medical costs covered by insurance. There are no other items to consider. They are contemplating two options: Option A: Sylvia has the baby, they do not get married, do not live together, and Sylvia lives with and takes full care of the baby. Option B: They get married, live together, and jointly take care of the baby. From a purely tax perspective, which option would you recommend for Sylvia and Stan? You must report empirical evidence from the facts here to support your conclusions. Please show formulas
Chapter3: Tax Formula And Tax Determination; An Overview Of property Transactions
Section: Chapter Questions
Problem 45P
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- Stan and Sylvia are each 22 years old, and not married. Sylvia is 8+ months pregnant with their unborn child, which is due in October of 2021. During 2021, Stan made $19,900 of wage income, and Sylvia made $49,000. Neither has given anything to charity, and Sylvia has all the medical costs covered by insurance. There are no other items to consider. They are contemplating two options:
Option A: Sylvia has the baby, they do not get married, do not live together, and Sylvia lives with and takes full care of the baby.
Option B: They get married, live together, and jointly take care of the baby.
From a purely tax perspective, which option would you recommend for Sylvia and Stan?
You must report empirical evidence from the facts here to support your conclusions.
Please show formulas
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